What is an Accountable Care Organization?

The debate about healthcare in the United States has been raging for many years. More recently it has gotten serious attention because of president Obama’s healthcare reform acts. Many of the provisions are points of contention, but many are necessary for a quality healthcare system that benefits American citizens. Important to this debate are the Accountable Care Organizations, which have garnered increasing interest with critics and proponents alike. Each Accountable Care Organization (or ACO for short) is within a network of heath care providers that maintain accountability for the care of Medicare patients enrolled in the program.

Origins of the Accountable Care Organization

The first mention of creating ACOs was made in 2006 by a director of research at Dartmouth Medical School. After that time the idea evolved and became a widely known term used by the media and policy makers as well. It became so influential over those three years that it was incorporated into the Patient Protection and Affordable Care Act.

Since then there have been numerous ACOs that have provided both sides of the political spectrum with ammunition. Many supporters of these Accountable Care Organizations note that the few existing systems are still being built slowly with new things being learned every day. Those who are opposed to them point to the problems that ACOs are already having. Nonetheless, as part of the latest healthcare reform act, the ACOs will continue to grow, learn from their mistakes, and hopefully become more efficient at providing the care that is needed.

Accountable Care Organization Information

ACOs – What is an Accountable Care Organization

Generally, the Accountable Care Organizations are designed to place some financial responsibility on healthcare providers so that they will improve conditions and manage the facility better. This is supposed to limit the amount of unnecessary expenditures that many facilities use, which is a reason why the costs of healthcare have been historically high in the United States (in more recent times in particular). Additionally, the goal of the ACO is to still allow patients to select their preferred facilities freely.

Overall, Accountable Care Organizations can help to reduce unnecessary medical spending by doctors and facilities while also maintaining a higher level of service for patients. While there have been problems implementing the system thus far, the savings between 2012 and 2015 are estimated at around $470 million. This is far from the gap that healthcare in America is costing, but at the same time it is still a good start. However, each Accountable Care Organization will need to prove why they should be maintained and how they can be made more efficient.

Stake in Accountable Care Organizations

One of the best ways to answer the question “what is an Accountable Care Organization?” is to explain the parties that have a stake in its success. Within the ACO system there are three stakeholders that maintain the system. The first of these three is the provider group, which is comprised of the hospitals, clinics, and other healthcare associates. Within the ACO network, there are many providers that must work together to provide the coordinated care that the patient population needs. The reason they have a stake in the ACO is so that they can control the costs of their maintenance and still provide the care that patients need.

The second important group is the payers. In the ACO system in the United States, the payers are usually the federal government paying through Medicare or some similar program. However, there are other payers, such as private insurance and employer insurance, which can cover the costs as well.

Finally, the last and final group that is necessary for a successful ACO system is the patient group. The beneficiaries of Medicare, private, or employer insurance will be the able to use the ACO system. However, unlike many other systems, the patient population can also include homeless or people who are uninsured.

Challenges of the Accountable Care Organization

As with any new program, there are many challenges that need to be overcome before the Accountable Care Organizations are successful. Chief among these challenges are the way in which these organizations are to be organized. The lack of specificity for implementation leaves gaping holes in the system that must be immediately repaired. Additionally, there are legal problems with the Accountable Care Organization because anti-trust laws might be violated. The government has offered voluntary anti-trust reviews of the Accountable Care Organizations, but that is not enough to placate the critics. Nonetheless, the system is young and needs more time to grow into something useful for the country.